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12 Facts About Money Everyone Thinks Are True

The following is a guest post from Kevin at Graduating from Debt. If you would like to submit a guest post, please contact me.

Money is a huge aspect in almost everyone’s life. Without it we could not eat, sleep, or just live. Below is a list of 12 facts about money everyone thinks are true and the truth behind them. In this article you will learn a bit about financial decisions people make and what they think they know about money as well as what is true and what you can do today to increase your happiness and gain more financial freedom.

12 facts About Money Everyone Thinks Are True

1. Students Graduate school with too many student loans – Although most students do leave school with a lot of student loans, did you know there are ways to pay them down quicker? Just giving up your daily Starbucks run and working while in college can save you lots of money.

2. Owning a house is better than renting – Owning a house costs money. You must pay for everything when something goes wrong. Some people even say the opposite and that renting is the better way to go. Experts like Suze Orman agree. Like Ramit Sethi says, you should look at owning a house as a purchase not as a investment. I agree with this view.

3. You Will Never be Able to Retire– Did you know that if you saved $300 a month from the time you were 26 until you were 46 and invested the earning until you were 65, you could be a millionaire when you retire? Hear me out first. If you saved that amount and gain 10% interest every year from the time you were 26 until you retired at 65, you will be a millionaire when you retire. It’s true. Do the math.

4. Buying a new car is cheaper than buying a used car in the long run – Conventional wisdom says that everyone should buy a new car because of the warranty. However, if you do the math, buying a used car is a lot less expensive than buying a new car. Once you purchase a new car and drive off the lot, it can lose up to 9% of itโ€™s True Market Value.

5. Cash advances are the only option when you need money – You are better off charging purchases on your credit card than getting hit with a 21% interest rate on your cash advances.

6. Bankruptcy is my only option for all my credit card debt – You owe it to yourself to fix the problem and not escape into bankruptcy. Contacting the National Foundation For Credit Counseling (1-800-388-2227) and speaking with a debt counselor they recommend is a better option.

7. If I can not pay my student loans, I will just file bankruptcyStudents loans stick with you forever and will not go away with a bankruptcy claim. You must figure out a way to pay those loans off.

8. You are unemployed and can’t pay your student loans, now what? – Contact your lender immediately and see if you qualify for a deferment. You will still gain interest but will not have to pay on them now.

9. I should start saving, even if I have credit card debit – No you should not. The interest gained on your saving account is lower than your credit card interest, so it is best to get that debt paid off first before you go ahead and start saving.

10. 401k’s are unstable, and I could lose all my money if my company fails – Relax. All that money is yours. The only money you could potentially lose is any money invested in the company itself. So spread your 401k account into different investments.

11. Once I invest the maximum into my Roth IRA, I have no where else to go with my money – Roth IRA’s are good because they give you a tax break. Once you max that out there are plenty of other options. You just will not get that great of a tax break like you do with a Roth IRA. Always keep saving whatever you can though.

12. I can only get a 10% or higher interest rate on my car loan because my FICO score is so low – The solution here is simple. Increase your FICO score and refinance your car loan. This will get you a better rate and give you some self accomplishment as well.

These are the 12 facts about money everyone thinks are true and the truth behind those facts. A lot of people just do not know what can be done with their money and get stuck. Contacting a financial advisor would be a great step in the right direction. Just knowing these 12 facts will really help you in becoming more financially free.

My name is Kevin Watts and I am the creator ofย www.graduatingfromdebt.com. I was like millions of recent college graduates in heavy debt with very little hope. With the right attitude and discipline I took control of my financial picture, and now I can say proudly that I am debt free.

Kim’s Comments: I think it’s easy to get caught up in what we’ve heard or been taught and not do our own research on what is best financially. I’ve certainly been guilty of believing a few of those “facts” myself.ย 

Image: Freedigitalphotos.net

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. I hate the idea of renting and will always do my best to own our own home.

  2. There are definitely two sides to every coin, and personal finance issues are no different. It takes time and effort to look into common “truths” but when you do you will find that things aren’t always as they seem.

  3. I’m one of those people who bought used cars and I still own a used vehicle today that I paid cash for. I have had no problems with it in over 5 years and it cost me a fraction of the price than if I bought it new. There’s no way i’d buy new unless I won the lottery, then I’d have options ๐Ÿ™‚

    • I bought used car almost 2 years ago and not once has it had an issue. Since I don’t drive very much I haven’t put many miles on it and the value has gone very little in the two years where as in a new car the value drops dramatically as soon you take it from the lot.

  4. I wanted to comment on the new/used car item. I don’t know anyone who says a new car is cheaper than a used car. I do, however, know people who believe a predictable monthly car expense is better than an unpredictable one. I have had a used car and paid for an extended warranty and still had to come out of pocket for repairs that weren’t covered in my “bumper to bumper” warranty.

    A new car with a warranty gives you the comfort of knowing that you won’t have a $1,000 repair bill waiting for you when you try to start your car tomorrow morning. For someone on a tight budget, a new car may be the best option to keep them whole every month.

    • I think it comes to what kind car you buy. There is always risk involved in a used car but the track record of reliable brands makes it a hard deal to pass by.

  5. Like DC said, there are definitely at least two sides to the issue this why it’s so important to do your due diligence to make sure you’re not following conventional wisdom without thinking. I would have to respectfully disagree with #9 though. I think that is the perfect time to have a small savings to help you avoid going out and using credit cards before you pay off your debt. Even if it’s only a couple hundred dollars it can definitely be beneficial as life does happen.

    • When I had a high credit card debt I put all my effort in paying it off instead of saving each month. For me it worked. I always thought that if there is an emergency I can use my credit card again.

      • I have to agree with John on this one, primarily because if debt got you into trouble once, it can get you into trouble again. I would rather establish the habit of having cash reserves that I can use for emergencies rather than falling back on debt. It certainly doesn’t have to be a huge amount of savings, but something to cover unexpected events is, I think, a smart idea. Best to start building those good habits as early as possible.

  6. I agree with 9. Again, doing the math it makes no sense to have savings at 0.1% and debt at 19.9%. You can still charge your card if you have another emergency. The above assumes you are a responsible adult and know a new pair of pumps is not an emergency.

  7. Not that I have student loans but I had no idea that if you claim bankruptcy that you still have your student loans. As far as if you have cc debt should you still save? I would say yes, you do need to have a little bit saved before you pay off cc debt. Just a little.

    • Student loans are not covered in bankruptcy. Only in extreme hardship cases then it might be possible to discharge your student loans but it is rare. However, this might change in the future.

  8. Interesting takes here, in the post and the comments. We are still in the process of educating ourselves on what we believe are our own money truths. I used to believe that owning was best, but now I can see why it might be better for some to rent. That being said, we are believers in buying new cars as opposed to used, just to avoid being stuck with lemons that we’ll be constantly repairing. I wonder what we’ll think next year? ๐Ÿ™‚

  9. Good points! I usually avoid generalities, but new v. old car purchase is not just comparing prices. I buy new, but inexpensively and keep it forever. It resolves most of any value differences. If you buy used and have to replace every 5 years, it costs more than my car that I keep for 17-18 years.

  10. Wow 17 years for a car is definitely reaping all the value you can!

  11. I’d just like to post one minor correction. While student loans are EXTREMELY difficult to discharge through bankruptcy it is technically possible. It would be more accurate to describe them as almost impossible to discharge. http://studentloansherpa.com/student-loans-bankruptcy-law/

  12. Owning versus renting depends very much on personal situation and location. We moved around a lot when I was growing up, so renting usually made the most sense.

  13. Yeah, I bought my house about 3 years ago and it has decreased in value substantially. I have also had several things go wrong with it that would have been covered by the owner of the house if I was renting. I can see how there might be a down side to buying a house as an investment.

  14. Interesting! I agree/disagree with some of these! I definitely don’t see buying a house as an investment….I see my rental properties as investments.

  15. I agree with the paying off the credit cards instead of saving part since my husband and I just took some money out of our (daughter’s college) savings to do that but I wonder where you can get the 10% interest to get the retirement money. I’m not that young but I would love for my daughter to be able to do that when she gets to be that age. But how?

  16. Great points. I absolutely don’t understand why more people don’t work in college.

  17. A lot of people dont realize number 7. If you think you are getting rid of student loans that easy think again. I say to each his/her own when it comes to renting vs buying. If you don’t have the money or just don’t want to buy then don’t.

  18. On the issue of “owning a house is better than renting”, a lot of times it isn’t a financial issue as it’s a psychology issue. I’d rather own a home than rent one because it feels safer. When I own, I feel like “this is my home. I feel safe here.” When I rent, you don’t get that same feeling.

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